Consumers expect to see fresh, new product every time they check out of an e-commerce site or step inside a brick-and-mortar store—and we can thank fast fashion for that.
Fair or not, the rapid product cycles fast fashion delivers have trained shoppers to think newness is, well, the new normal. Biology plays a role in this, too. It’s well known that shopping produces a dopamine hit in our brains so we’re programmed to crave a constant parade of original and unexpected goods to delight our senses.
But how are legacy retailers expected to compete with the speed consumers demand? In recent years some merchants have responded by reinvesting in their private-label brands to give shoppers elevated, engaging product. Target, in particular, seems to have the magic touch in building billion-dollar private brands in one year’s time.
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Tami Fersko, group president of Li & Fung Americas, said consumers increasingly don’t distinguish between private and national brands, which in some ways speaks to the power of the brand, regardless of where it’s sold. For example, “private label” doesn’t spring to mind when Zara is mentioned, even though it’s a brand sold solely through a single retail chain.
A number of private labels are “tried and true brands that people love and trust,” Fersko added, noting Li & Fung has been on a journey of learning how to develop and design for retailers’ owned labels with the same care that national brands receive.
“They don’t want to be first to be second anymore,” Fersko said at the Retail Bonfire event hosted by Coresight Research and Salesforce last week. “They want to be on trend and want be out there for the consumers.”
Though retailers have stepped up investments in their proprietary labels, the Li & Fung executive noted many have been slow to embrace the kinds of digital advancements that would help them move with the agility required to compete today. Buyers are still very accustomed to and reliant on receiving physical samples before committing to an order, Fersko said, though our behavior as consumers sees us buying through our smartphones without physically engaging with a product.
“We’ve been able to slowly transform the buying community to understand the margin for error is not that much different when you do it digitally,” she explained.
Requiring a physical sample might be good sense when you’re ordering thousands of units many months in advance, said Resonance NYC co-founder Joe Ferrara, but if you’re trialing 100 units that drop in two weeks, it’s probably okay to greenlight a virtual sample for the sake of time and efficiency.
“If you’re wrong, you’re wrong by such a small margin,” he noted. “If you’ve got a winner, chase it fast and hard.”
The effort to deliver intriguing new product might focus on fast-moving fashion garments, but even core items like T-shirts can benefit from expanding the options, Fersko noted. “What really sells successfully for Amazon is core and core plus,” she added. “They really hit a home run whether it be Amazon Fashion or some of their private brands.”
However, a recent report from Jungle Scout discovered apparel comprises just 1 percent of private-label sales for Amazon, though the category represents 88 percent of Amazon’s total own-brand products.
Regardless, Ferrara said, the retailer imperative to focus on freshness is independent of price point.
